GST UPDATE No 289 ON PRACTICAL DIFFICULTIES IN AMENDED GSTR-3B PART-3

We have extensively covered various presentational issues faced by the assessees in the new format of GSTR-3B which has been made applicable for the return filed for the month of August, 2022. In the present update, we seek to point out some more practical difficulties being faced by the assessees while filing their GSTR-3B in the new format.
We hereby discuss the various practical issues of presentation being faced by the assessees as follows:-
1. Adjustment of ITC pertaining to bill of entry not reflected in serial no. 4A(1) of GSTR-3B:- It is observed that at times, input tax credit of certain bill of entries are not reflected in the serial no. 4A(1) of the GSTR-3B due to technical glitches on the portal. However, the original copy of bill of entry and the imported goods have been received in the premises of the assessee. In such a scenario, the assessee will edit the amount mentioned in serial no. 4A (1) of the GSTR-3B itself.
Now, the question arises is in case where the imported goods are not received in the factory premises or the bill of entry is not received but the amount of input tax credit (say Rs. 11,000/-) is being reflected in GSTR-2B and the auto-populated figure of serial no. 4A(1), whether the said amount of Rs. 11,000/- is to be reduced from serial no. 4A(1) of GSTR-3B or the said amount of Rs. 11,000/- will need to be reflected as reversal under serial no. 4B(2) of GSTR-3B. Thereafter, if the amount is reflected as reversal, in such case, when the imported goods and bill of entry are received, the ITC of Rs. 11,000/- is to be claimed in serial no. 4A(1) and also reflected in serial no. 4D(1). In nutshell, whether assessee needs to follow the practise of reflection of discrepancy in the auto-populated figure with respect to import of goods in the same manner as is done for “all other ITC”? If the clarification issued vide Circular no. 170/02/2022-GST dated 06.07.2022 is pursued, it is found that reference is made to auto-population of table 4A of GSTR-3B from various tables of FORM GSTR-2B. Consequently, as the
circular does not specifically refer to table 4A(5), it appears that the mechanism as suggested needs to be followed for ITC pertaining to different clauses of table 4A. Hence, the practise of reflecting Rs. 11,000/- as reversal under serial no. 4B(2) of GSTR-3B needs to be followed. It is pertinent to mention here that as per provision contained in section 16(2)(aa) of the CGST Act, 2017 requires that in order to claim ITC, the details of invoice or debit note has been furnished by the supplier in GSTR-1 and such details have been communicated to the recipient in GSTR-2B. The provision does not mentions bill of entry so the input tax credit of bill of entry can be claimed irrespective of the fact that the said ITC is appearing in GSTR-2B or not. Consequently, there should not be any requirement to follow the mechanism of presentation as stated in the circular with respect to import of goods. Furthermore, following the practise as mentioned in the circular will increase complexities as it will lead to double reporting of figures thereby requiring in-depth analysis while filing annual return. However, in order to maintain consistency, the assessees may follow the mechanism of presentation as stated in the circular for ITC pertaining to import of goods also.
2. Treatment regarding discrepancy in auto-populated figure of ITC of ISD:- At times, it is possible that there is discrepancy in the auto-populated figure of ITC in serial no. 4A(4) of the GSTR-3B. For example- out of 5 invoices, ITC pertaining to 3 invoices are only being reflected in the auto-populated figure. In such a case, the assessee will again need to amend the figure reported in table 4A (4) by adding the amount of ITC pertaining to 2 invoices not considered in the auto-populated figure. Likewise, if in the above example, the assessee had not received 2 invoices, but ITC pertaining to the said 2 invoices (say Rs. 11,000/-) was reflected in the auto-populated figure, then the assessee needs to reflect the said amount of Rs. 11,000/- as reversal under serial no. 4B (2) of GSTR-3B. Thereafter, when the invoices are received by the assessee from ISD, the ITC of Rs. 11,000/- is to be claimed in serial no. 4A (4) and also reflected in serial no. 4D (1). The discussion as regards following the procedure as prescribed in the Circular no. 170/02/2022-GST dated 06.07.2022 is not repeated for the sake of brevity.
3. Treatment of auto-populated figure of RCM credit in serial no. 4A(3) of GSTR-3B:- The figure auto-populated in serial no. 4A(3) of theGSTR-3B is always amended as most of the time, the amount of tax paid under RCM is different from the RCM entries reflected in GSTR-2B. Moreover, the auto-populated figure may also consist of RCM entries, the ITC of which is blocked such as rent-a-cab services. Consequently, the assessee will have to reflect the ineligible portion of ITC pertaining to RCM as reversal under serial no. 4B(1) of the GSTR-3B. Needless to repeat that since the clarification refers to table 4A without specific clauses, it is not advisable to reduce the said ineligible input tax credit from table 4A(3) of GSTR-3B.
4. Complications due to amendment in invoices by suppliers:- Practically, invoices are amended by the suppliers due to which assessees are in dilemma to report the transaction in the new format of GSTR-3B. To illustrate- One invoice issued in the month of June, 2022 involving ITC of Rs. 4500/- was wrongly uploaded by the supplier in GSTR-1 as Rs. 4300/-. As the ITC was wrongly reflected in GSTR-2B as Rs. 4300/-, the recipient assessee did not claim the ITC in the month of June, 2022. Thereafter, supplier amended the invoice in the month of August, 2022, due to which the net effect of Rs. 200/- was being reported in the auto-populated ITC under table 4A(5) of
the GSTR-3B. The assessee is unclear as to how to report this transaction in the new GSTR-3B. In our opinion, the assessee is required to add Rs. 4300/- in serial no. 4A(5) in the month of August, 2022 and also report Rs. 4300/- in 4D(1) of GSTR-3B.
5. Credit note reflected in GSTR-2B but not received by the recipient assessee in August, 2022:- There may be situation that the supplier issues credit note for an earlier invoice, in the month of August, 2022 which is reflected in GSTR-2B and the auto populated figure of table 4B(2) for the month of August, 2022. However, the recipient assessee has not reversed the said ITC as the credit note is pending to be received by them. In such a case, the assessee will have to reduce the amount of table 4B(2) by the said credit. Thereafter, the assessee will report the said credit in table 4B(2) on actual receipt of the credit note in the subsequent month.
6. Debit note reflected in GSTR-2B but not received by the recipient assessee in August, 2022:- There may be situation that the supplier issues debit note for an earlier invoice, in the month of August, 2022 which is reflected in GSTR-2B and the auto populated figure of
table 4A(5) in the month of August, 2022. However, the recipient assessee has not availed input tax credit as the debit note is pending to be received by them. In such a case, the assessee will have to reverse the said ITC in table 4B(2) and also reflect the said ITC in table 4D(1). Thereafter, the assessee will report the said ITC in table 4A(5) on actual receipt of the debit note in the subsequent month.
The list of problems faced by the assessees while filing GSTR-3B in new format is increasing day by day. It is hoped that the government issues suitable clarification to resolve various presentational disputes at the earliest possible so that proper compliance of filing GSTR-3B in the new format is being done by the assessee.

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GST UPDATE No 289 ON PRACTICAL DIFFICULTIES IN AMENDED GSTR-3B PART-3

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